Export-dependent Palestinian industries such as agriculture and manufacturing have been among the sectors most affected since Israel closed its borders and the United States and the European Union imposed sanctions on the Hamas-led government.

tates and the European Union imposed sanctions on the Hamas-led government. In 2005, exports from the Palestinian Authority totaled $3.4 billion, amounting to 83 percent of Gross Domestic Product, according to a report by the World Bank released in April.

The same study concluded that sanctions imposed on the Palestinian Authority since Hamas won January's parliamentary election will cause the economy in the Occupied Territories to shrink by over 27 percent in 2006, with unemployment and poverty hitting 47 percent and 74 percent respectively in 2008.

As of April 2006, the average number of trucks leaving Gaza through Karni - the main border crossing for trade between the Gaza Strip and Israel, which has been mostly closed since the beginning of the year - was only five, according to a study by the Peres Center for Peace released in May.

"The industrial sector cannot compete with the cheap products imported from China, especially shoes and clothes," Hazem al-Mashharawi, a project advisor for a vocational training program in the Occupied Territories, told The Daily Star.

Already, unemployment in the agricultural sector has increased by 2 percent in the West Bank in the first quarter of 2006, according to statistics published by the International Labor Organization (ILO).

The economic constriction has led to a rise in crime as people turn to smuggling to compensate for lost revenue.

"The Palestinian Authority monopolized the import and distribution of tobacco, cement and flour in the Palestinian market, which caused people to get these products in an illegal way in order to cover the demand for it and led to the formation of a black market," said Sakr Abou Fakhr, assistant chief editor of Palestinian Studies magazine.

Reema Hammami, a professor of anthropology at Birzeit University in the West Bank and director of the Women's Affairs Research and Training Center, said that in addition to smuggling stolen cars from Israel, Palestinians have been using the tunnel from Rafah across the Egyptian border with Gaza to bring in all sorts of goods, including guns.

"Across both the Egyptian and Jordanian borders, above-ground smuggling of cheap goods is popular where people carry suitcases, pretending they're bringing presents home but are actually bringing cheap goods in to sell," Hammami said.

Mashharawi added that apart from smuggling, some people have been replacing their cars' gasoline engines with illegal diesel ones.

"Diesel engines are popular because a liter of petrol costs $1.50 and has low mileage while diesel has better mileage and costs only $ 0.80," she explained.

Mashharawi said several aid organizations have started offering technical training programs in an effort to equip workers with marketable job skills.

The ILO has launched a job creation project, in coordination with both the United Nations and the private sector, in a bid to create jobs in factories and workshops.

Under the program, the ILO will pay the wages of employees for three months, after which the employers can decide to hire those workers who are most beneficial to their respective businesses.

Mashharawi warned, however, that "this approach does not work in most of the cases because employers themselves cannot pay for employees."